Gainey McKenna & Egleston Announces a Class Action Lawsuit Has Been Filed Against MagnaChip Semiconductor Corporation -- MX
April 24 2015 - 7:00PM
Gainey McKenna & Egleston announces that a class action lawsuit
has been filed in the United States District Court for the Northern
District of California on behalf of all persons or entities that
purchased the securities of MagnaChip Semiconductor Corporation
(“MagnaChip” or the “Company”) (NYSE:MX) during the period from
February 1, 2012 through February 12, 2015 (the “Class Period”),
including purchases of MagnaChip common stock pursuant and/or
traceable to the Company’s February 6, 2013 follow-on public
offering.
MagnaChip is a South Korea-based designer and manufacturer of
analog and mixed-signal semiconductor products mainly for
high-volume consumer, computer and communication applications,
which includes smart phones.
The Complaint alleges that during the Class Period, defendants
issued materially false and misleading statements about the
Company's operations and financial results, and failed to reveal
that its internal controls and procedures governing financial
reporting were not adequate. The Complaint further alleges that the
Company failed to reveal that it was improperly recognizing
revenues, and as a result its prior financial statements overstated
its revenues and earnings for the years 2011, 2012, and the first
nine months of 2013. The Complaint also alleges that as a result of
defendants' false statements, MagnaChip securities traded at
artificially inflated prices during the Class Period, with its
stock price reaching a high of $23.57 per share on October 21,
2013, and that MagnaChip’s controlling shareholder, Avenue Capital
Management II, L.P., sold more than 16.1 million MagnaChip shares
in secondary stock offerings and on the open market during the
Class Period at fraud‑inflated prices, receiving $232.675 million
in gross proceeds.
After a January 2014 disclosure that it could not timely file
its annual financial report for fiscal 2013, on March 11, 2014,
MagnaChip announced that it would be restating its 2011, 2012 and
2013 financial results after concluding that it had “incorrectly
recognized revenue on certain transactions,” stating it “expect[ed]
that the primary impact of the correction of prior revenue
recognition errors [would] be to recognize revenue on certain
transactions in the periods in which the distributor ship[ped] the
products to the end customer rather than the periods in which the
products [were] shipped to distributors.” However, on February 12,
2015, after the market closed, MagnaChip filed its Annual Report on
Form 10‑K with the SEC for the fiscal year ended December 31, 2013,
restating its financial results for fiscal years 2011, 2012, and
the first three quarters of 2013, resulting in a total $142 million
change in earnings, wiping out approximately 55% of its reported
profits for those periods. The Complaint alleges that as a result
of this news, MagnaChip's shares plummeted $7.50 per share to close
at $7.52 per share on February 13, 2015, a one‑day decline of
nearly 50%.
If you wish to serve as lead plaintiff, you must move the Court
no later than June 22, 2015. A lead
plaintiff is a representative party acting on behalf of other class
members in directing the litigation. If you wish to join the
litigation, or to discuss your rights or interests regarding this
class action, please contact Thomas J. McKenna, Esq. or Gregory M.
Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300,
or via e-mail at tjmckenna@gme-law.com or
gegleston@gme-law.com.
This press release may be considered Attorney Advertising in
some jurisdictions under the applicable law and ethical rules.
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